What to Avoid During a Home Purchase

With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or appliance store. There still remain a few major hurdles to jump before closing. Below you'll find a list of things to stay away from during this critical time of your home purchase.

Don't buy luxury items. Although you may be dreaming of ways to turn your new home into a castle, try to stay away from major purchases like appliances, electronics, or furniture. We also recommend that you keep away from vacations and vehicle purchases until the closing of your loan. Using credit cards to buy new living room furniture could jeopardize your lending process by altering your numbers dramatically. Because lenders are perusing your bank accounts, a large cash purchase is also not advised.

Don't get a new job. Stability in your work history is a good thing to lending institutions. Getting a new job may not jeopardize your ability to qualify for a mortgage loan - especially if you are improving your salary. However, if you switch careers before you qualify, your process could fail or be bogged down.

Don't switch your accounts to a new bank or move around your money. While your lending institution reviews your loan package, you will probably be asked to submit bank statements for recent months for your checking accounts, savings accounts, money market accounts and other liquid assets. In order to avoid fraud, lenders want to see clear documentation of how you earn your living and where additional wealth comes from. Even for innocent reasons, moving around funds or switching banks might make it harder for the lending institution to verify your bank history.

Don't give funds directly to your seller (generally in the case of of "for sale by owner") for a "good faith" deposit. As a rule, your good faith deposit belongs to you, not to the seller until the sale is final. Although some individual sellers might not know this, the good faith funds should be used for the buyer's closing expenses. Find an attorney or other neutral party who can hold the money or put it in a trust account until you close. The contract should document to whom the funds go if the transaction falls through.

At Amity Mortgage LLC, we answer questions about this process every day. Give us a call: 2037296681.